Thursday, January 7, 2016

Unconditional cash transfers

We in the development business are big on cash transfers to poor families. Often it is the most effective way to improve their wellbeing, even more so than if a development agency used that money to buy families goats or give them job training or something. This makes intuitive sense--who better to decide what poor people need to spend money on to improve their lives, than the poor people themselves? But usually we talk about conditional cash transfers, meaning that the money is only given to families that send their kids to school, or take them to monthly nutrition monitoring sessions, or vaccinate them, etc. This is also sage--we as donors thus attain two positive outcomes at once (the behavior we donors demand of cash recipients, and their benefits from having the cash).

In any case, this example from North Carolina shows that unconditional cash transfers with no strings attached, especially if they are of significant sums over a long time period, are very effective at achieving positive development outcomes.